Heuristics and Biases Illustrations

A heuristic is a mental shortcut used by humans when attempting to make a decision or a judgment as one may not have the needed time to think things through in a certain situation. This mental shortcut can be seen as involving cognitive stereotypes or past experiences that influence one’s present or future thoughts. Heuristics are strategies which reduce the complex tasks of assessing probabilities and predicting values to simpler judgmental operations. It is also a technique to arrive at satisfactory solutions with the modest amount of processing, implying that people seek to reduce the effort associated with decision processes. Therefore, heuristics use principles of effort-reduction and simplification. Therefore, heuristics are acquired habits that might lead one to either make faulty decisions or successful ones. As human beings we opt for different kinds of heuristics, which include the following: availability heuristics, affect heuristics, anchoring heuristics and representativeness heuristics.

The representativeness heuristic is the judgment heuristic; it is the heuristic a human relies on when trying to judge a person, a phenomenon or an event based on an existing pattern in one’s mind. In our everyday life, we tend to apply few forms of representativeness heuristics. For example, last summer, I and my two friends, Sharon and Sandy went on a trip to Las Vegas. Sharon and I decided that we will not gamble. However, one night Sandy started gambling. After couple games, Sandy met back with us at the casino and told us that she had acquired a lot of money after gambling in a table and recommended that we give it a try that night. Sharon, convinced that she would be destined to the same outcome as our friend Sandy, took the decision to make it to the table and gamble. She decided to venture with all the money in her possession but she ended up losing all the amount. What happened in this specific situation was that Sharon depended on our friend’s experience which suggested the high probability of winning money; a suggestion that is far from being true primarily because when gambling, there always exists a 50/50 chance of winning. However, Sharon ignored that probability and instead she developed the judgment based on a similar experience and therefore bid all her money without thinking it through. Since the representativeness heuristic is one type of heuristic that we use when making judgments. In this particular heuristics, we estimate the likelihood of an event by comparing it to an existing prototype that already exists in our mind. Our prototype is what we think is the most relevant or typical example of a particular event or object, which in this case Sharon had the prototype of Sandy winning gambling at that same table just a few minutes ago, instead of thinking about the probability of 50/50 chance of winning.
Another example of application of heuristics in everyday life would be anchoring. The anchoring heuristic is when people place a definite number or an estimate value for something then adjust to it. This type of heuristic is mainly used in uncertain situations. Decision makers will form judgments by first anchoring to an important and accessible value and then adjust their evaluations from this value. An example of that type would be: My cousin Joseph had planned to purchase a brand new car next year. Because he was aware that he would be ready to pay for its market value then. However, one day as he was on his way to work, he noticed that the car he was aspiring to purchase was on sale. He therefore altered all plans he had previously made and decided to buy the car that same evening. Even if such sudden alteration would mean that the price of the car would have been more expensive if he decided to buy it that day instead of waiting till next year (when the price of the car would go down even more because the new model was going to come out). Anchoring proposes the idea that when we consider a decision, our mind offers disproportionate weight to the first information it receives. Anchors are often invisible and disguised, as in Joseph’s case, the sale sign grabbed his attention and convinced him to change the already set plan that he had planned before.

When time and information are limited, or the importance of a decision is considered to have minimal risk, the use of heuristics helps to arrive at quick and typically reasonable decisions, to keep us from getting mired in these frequent day to day events. Unfortunately, the human mind tends to rely on these heuristic methods which lend themselves to bias, which in turn negatively influences important decision making, and can lead to faulty or non-optimal judgments. Therefore, the resulting errors from applying heuristics are biases. Many biases are documented, namely overconfidence, confirmation trap, hindsight bias, etc. The confirmation bias refers to the tendency to selectively search for and consider information that confirms one's beliefs. It is a consequence of the way perception works. Beliefs shape expectations, which in turn shape perceptions, which then shape conclusions. Thus we see what we expect to see and conclude what we expect to conclude. People use confirmation bias to prove themselves right and hold on to beliefs that we believe to be true. Confirmation bias also helps us overlook any information that may disprove our belief. Like in the case of my friend Julia, who used to work as a bartender and had a pair of lucky jeans that she liked to wear to work. She felt that as long as she wore those jeans, she would make good money that night and it would be a good night. However, there were several nights that it did not go as well as she would have liked but because she had convinced herself that her lucky jeans were lucky, she still had that expectation of getting a good amount money and being an good night whenever she would wear them. So in this case Julia used confirmation bias to push the things that have happened at work while she was wearing the lucky jeans to the back, and only think and focus about the good things and good money she had gotten while wearing the lucky jeans. Confirmation bias is a way of thinking a particular way and pretty much having your mind set on what you believe is true. Like in this case, where in reality the lucky jeans were not actually lucky as she used to think. Instead, she had just been used confirmation bias to convince herself that they were.

These are the few examples of Heuristics and biases that I can think of for the purposes of the class. But there are many more that we apply in our day-to-day lives most of our actions could be explained with one or more heuristics or bias. So, in conclusion, heuristics can be regarded as mental shortcuts which humans make use of on a daily basis; sometimes without even noticing so. This is precisely why psychologists affirm that heuristics are subconscious habits. That said, people would watch out for them and try to avoid total reliance on heuristics or mental shortcuts when making decisions.…...

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